Pakistan Economy: In its most recent biannual report, the World Bank has expressed concern over Pakistan’s economic trajectory and painted a dire image of the country’s financial situation. In the face of slow economic development and high inflation, over 10 million people are at risk of becoming impoverished, according to the World Bank’s biannual Pakistan Development Outlook study.
Concerns Over Economic Growth
The South Asian country’s meagre 1.8% economic growth and its rapidly rising 26% inflation rate in the current fiscal year worry the international lender. Pakistan’s growth is expected to languish at a pitiful 1.8% despite efforts at economic recovery, while the country’s poverty rate is expected to remain at 40%. With over 10 million individuals at risk of falling into poverty, the research highlights the vulnerability of those who are barely above the poverty line.
Budget Deficit Concerns
The nation will not meet its main budget goal, according to the World Bank as well. It is anticipated that there will be a three-year deficit. The crisis caused by rising prices and slow wage growth is still getting worse.
The research claims that in the first quarter of this fiscal year, when inflation was above 30%, everyday labourers’ earnings climbed by just 5% nominally. This has consequently affected many families’ access to healthcare and education across the country.
Deepening Cost-of-Living Crisis
As the cost-of-living crisis deepens, the research has also highlighted the fact that food security is still an issue in several regions of the nation. This is primarily in areas hit by natural calamities such as the floods in 2022. There was significant damage to districts in Sindh, Balochistan, and Khyber Pakhtunkhwa. Pakistan’s economic problems are exacerbated by low foreign reserves, unpredictable policies, and ongoing budget deficits. The nation’s current account deficit has decreased, however issues including falling remittances and high inflation rates still exist.
World Bank’s Economic Growth Projections for Pakistan
The World Bank predicts that Pakistan’s economy would grow moderately in the future, falling short of declared goals. For the upcoming fiscal year, only a 2.3% economic growth rate has been projected. The numbers are even less than the 2.6% annual pace of population growth. Pakistan’s road to recovery is still unclear despite the implementation of fiscal consolidation measures, which poses serious concerns to the country’s social and economic stability.